Access to the corporate bond markets has been re-opened for many Spanish and Italian companies in recent days, especially after the European Central Bank (ECB) announced its new bond-buying plans. Spanish and Italian banks and utility companies have been quick to take advantage of the lower risk premiums.

On Monday alone, Spanish utilities Iberdrola and Gas Natural announced the successful placement of their bonds.

Iberdrola announced that it successfully placed a bond issuance for €750m. The bonds mature on September 2017, carry an annual coupon of 4.5%, and were priced at 99.536% of their nominal value.

Similarly, Gas Natural announced that it issued bonds maturing in September 2020 for €800m. According to the company, they were priced at 99.455% of their nominal value and carry a 6% coupon.

Demand for the bond issue totalled more than €4.6bn and included a wide range of institutional investors, most notably from Germany, France, and the United Kingdom. Spanish investors only represented 7% of the total, the company explained.

The funds raised in Gas Natural's bond issue will be used to optimise the company's financial stucture, increase its weight in the capital markets, extend the lift of its debt, and improve the maturities profile, the company explained.

Several companies followed Telefonica after its successful bond issue last week. Other companies that recently tapped the debt markets include BBVA, Banco Santander, Snam, and Intesa Sanpaolo.

According to Reuters, debt traders expect more issuances to follow.

"The companies are taking advantage to improve their liquidity risk, which had increased considerably in recent months," one debt trader said.

"I think we're going to see more issuances especially if today's deals are closed successfully, which is how it's looking now."

JP

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